Torrent Pharma Ltd - Growth bouncing back; Elder synergies key ahead - Emkay

Reco: HOLD
CMP: Rs 507
Target Price: Rs 515

- Torrent Pharma Q3FY14 results (vs. expectations) - Revenue at Rs10.2bn (vs. Rs9.5bn), EBITDA at Rs2.2bn (vs. Rs1.9bn) and Adjusted PAT at Rs1.6bn (vs. Rs1.3bn)

- Domestic formulations revenue posted strong growth of 15% yoy (outperforming the industry). Export formulations up 42% yoy, led by a healthy growth in US, Brazil, Europe and RoW

- Increase in debt and depreciation & amortization lead to EPS dilution in near term. Synergy benefits from Elder deal hold the key going ahead. Brazil and US growth signs healthy

- Recent rally in the stock (previous TP of Rs 488 achieved) leaves little room for upside. We downgrade to HOLD with a target price of Rs515 at 14x Dec-15 TTM EPS of Rs 36.8.

Source : Equity Bulls

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